Japanese Shippers Face Sanctions

U.S. sanctions against Japan’s three largest shipping companies went into effect Thursday after Japan failed to meet demands that it eliminate alleged restrictive practices against U.S. shippers in its harbors.

Yosuke Watanabe, a spokesman for Japan’s Transportation Ministry, said no agreement was reached in last-minute talks between the ministry and Japanese shipping officials. “The time limit has passed,” he said.

The sanctions, which mandate a fine of $100,000 for each arrival on vessels operated by Kawasaki Kisen Kaisha Ltd., Mitsui O.S.K. Lines Ltd. and Nippon Yusen KK, were to be enforced on their next ships arriving at U.S. ports.

Each company has a full container ship due in a U.S. port today - Tacoma, Seattle and Houston. Spokesmen for the three companies said there were no plans to delay or reroute the ships.

They said they were hoping for a negotiated agreement that would remove the sanctions or minimize their effects.

The sanctions were proposed in February by the independent U.S. Federal Maritime Commission to retaliate for alleged restrictive practices against U.S. shippers in Japanese harbors.

The sanctions were to have taken effect April 14. But the Clinton administration asked regulators to hold off, saying Japan’s government had acknowledged anti-competitive practices on its docks and was taking steps to correct them. The sanctions were then suspended until 12:01 a.m. today.

The Federal Maritime Commission complained about what it regards as two restrictions on competition.

One is a practice known as “prior consultation,” in which any changes in shipping practices carried out by any companies, domestic and foreign, using Japanese ports must first be discussed with the Japan Harbor Transportation Association.

The other is Japanese harbors allegedly discriminating against U.S. carriers that have attempted to run their own operations in Japanese ports.

“We are extremely disappointed that there appears to be no agreement among the parties at this late date,” John E. Graykowski, acting U.S. maritime administrator, said in a statement in Washington hours before the sanctions went into effect.

“We continue to believe the solution to this problem is entirely in Japan’s hands,” he said.